The 65th ACADEMY AWARD NOMINATIONS : The Declaration of Independents : Commentary: The Oscar nominations pointed out what is terribly wrong with how the movie establishment conducts its business.

The Oscar nominations extravaganza, traditionally a celebration of Hollywood film at its most Hollywood, turned Wednesday into a Day of the Dead for the studio system, pointing out in the most unmistakable way what is terribly wrong with how the movie industry goes about its business.

For while Paramount Pictures could manage not a single nomination for even one of its films and Buena Vista, the distribution arm for the entire Walt Disney organization, managed to get nominations only for the redoubtable “Aladdin,” the independent film distributors had a field day.

Miramax Films, the mighty monarch of the indies, earned nominations for three of its films, including “Enchanted April,” “Passion Fish” and (of course) “The Crying Game.” New Line/Fine Line matched that with nods for “The Player,” “Glengarry Glen Ross” and “Damage,” while Sony Pictures Classics not only had a pair of nominations for “Indochine,” but a full nine for “Howards End,” tying it with “Unforgiven” in this year’s top spot.

The argument could even be made, given Clint Eastwood’s special status within Warner Bros., that the freedom he was allowed from the usual studio oversight with “Unforgiven” means that it should be considered an independent film as well. Certainly it is hard to picture David Webb Peoples’ wonderfully idiosyncratic (and Oscar-nominated) script not getting tinkered with and blanded out had someone other than Eastwood held the reins to the picture.

It is in this area of screenwriting, the core of the filmmaking process, that the independent dominance looks strongest. Five of the 10 nominees were distributed by independents and both Woody Allen’s “Husbands and Wives” and the George Miller-Nick Enright “Lorenzo’s Oil” are offbeat enough that only the influence of their directors placed them under a studio roof. Of the remaining three, “Unforgiven,” as noted, had its integrity protected by a major player, leaving only Bo Goldman’s script for “Scent of a Woman” and Richard Friedenberg’s for “A River Runs Through It” as traditional Hollywood entries. Two out of 10.

Making matters worse (or better, depending on your point of view) is that the nominations for the independents tended overall to be in the more prestigious above-the-line categories. Five of “The Crying Game’s” six nominations, for instance, were in the best picture-actor-director-screenwriter slots.

And while “Glengarry” and “Damage” had only one nomination each, both were sought-after acting ones (for Al Pacino and Miranda Richardson, respectively). The bloated “Bram Stoker’s Dracula,” on the other hand, may have managed four nominations, but they were all in the non-sexy craft areas.

The key to all of this is that it’s the Oscars we’re talking about, not some effete critics’ group. The problem with Hollywood is not that it can’t make ethereal art. That’s never been its mandate and it never will be. It’s that despite (or maybe because of) all the money it spends, all the deals it cuts, all the egos it feeds and all the testing it indulges in, the studio system is losing the knack of making the kind of superb mass entertainment that should be its bread and butter.

Like the proprietors of Chekhov’s “The Cherry Orchard,” who know that there used to be a recipe for making jam out of all those cherries but can’t quite remember what it is, the poobahs of Hollywood have lost touch with their mandate and more often than not don’t have a clue as to how to carry it out.

For if the rest of the Oscar nominations show anything, it is that the academy has certainly not lost its taste for mainstream, middle-of-the-road entertainment. “A Few Good Men,” though it did not do as well as pundits had predicted, did get four nominations, including best picture, and “Scent of a Woman” did the same.

Also, when it had a choice with performances, the academy was not above choosing the obvious over the subtle, nominating Mary McDonnell in “Passion Fish” as best actress and passing over Alfre Woodard in the same movie while giving a supporting nod instead to the crowd-pleasing Marisa Tomei in “My Cousin Vinny,” a nomination that had to be the biggest surprise of the day.

Not surprising, although unfortunate, was the almost total exclusion of Spike Lee’s “Malcolm X” from the nominations. His film got but two (one for star Denzel Washington, one for costume design), the same total as Barry Levinson’s “Toys,” and Lee’s lack of support is a reflection of how the establishment feels about his gadfly approach to filmmaking.

Two areas where it has become traditional to second-guess the academy, the best foreign language and best documentary categories, have not let down those eager to dissent, though it increasingly feels like shooting fish in a barrel to complain about the selections of that pair of committees.

Though no one expected the strait-laced foreign film group to nominate anything as far out as the brilliant Canadian film “Leolo,” (and it didn’t), eyebrows will be raised at the exclusion of such solid works as “The Stolen Children” from Italy, China’s “The Story of Qiu Ju” and the Mexican “Like Water for Chocolate.”

With the documentary committee the situation, as usual, is worse, with a good deal of fine work, everything from “Brothers Keeper” to “The Donner Party” and “Visions of Light” inexplicably ignored. Saddest of all, “Black Harvest,” one of the most exceptional documentaries in memory, was passed over as well, apparently, rumor has it, because the committee couldn’t believe that some of its footage hadn’t been staged. Sometimes, where this group is concerned, too good can be no good at all.